Chamath: The ENTIRE Stock Market is Crumbling Down ( When to buy)

To those who are investors and or follow the stock market and the economy, you are aware of the current situation. Thirty trillion dollars printed, and the Fed now has to cut the balance sheet by raising interest rates to cut inflation. Chamath believes inflation to be more transitory than expected. He thinks the Fed will overdo it and cause a recession.

Jeremy Grantham is calling it an Epic super bubble due to these factors.

• Covid.
• Money printing.
• Unexpected inflation.
• Higher interest rates.

An overview of what the Fed has printed 30 trillion, Equities have corrected by 10 trillion if equities continue to crash from rising rates and will leave the net money outflow in a negative.

The evidence

• Growth Stocks are crashing.
• Cryptocurrency crashing.
• Bifurcation is the division in the global economy.

The linked video above talks about how the US will raise inflation while China does the opposite. If the American dollar is worth more, it would have higher comparative returns. People will hold more American currencies than the Yuan, causing the won to drop. How long will that last? This will put extreme pressure on the banks. The question now is, Will history repeat itself? Watch this part about 2018. 8:07

Chamath has become bearish in his thinking due to

• China is showing slowdowns dropping by .5%.
• Germany showed slowdowns dropping .5% to 1%.
• Fed being too optimistic about the economy.
• Hikes will crash the economy.
• Overcorrect to create a recession.
• Supplies chain issues.
• Too much inventory.

Chamath thinks that maybe rate hikes have already been priced into the markets, and time to start dollar-cost averaging into the market. He also states that when you look back at past examples, rate hikes were added in the stock markets rallied.

Bill Ackman is known for the manipulation of the markets. To learn more, click on the link to follow 15:08

Overall, if the economies worldwide are weak and at lower interest rates and we add in inflation and a correction, it is much more transitory than expected.

OVERCORRECTION = RECESSION

Now let’s say we go into recession. It does not mean we will see the markets crash. It may drop down 20%, but there is an estimated 11 trillion dollars in savings all over just waiting for the right investment opportunities. You have hit bottom when you have all the big tech companies down 25% because they have never dropped lower than this. Have we got close to the bottom?